California, Quebec and Ontario Sign Agreement to Link Carbon Markets


9-22-2017

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QUEBEC CITY - Governor Edmund G. Brown Jr. today signed an agreement with the leaders of Quebec and Ontario to officially integrate their cap-and-trade programs, expanding the three-year partnership between California and Quebec to include Ontario, Canada's most populous province and leading industrial region. The agreement takes effect January 1, 2018.

"Climate change, if left unchecked, will profoundly disrupt the economies of the world and cause untold human suffering," said Governor Brown. "That's the reason why California and Quebec are joining with Ontario to create an expanded and dynamic carbon market, which will drive down greenhouse gas emissions."

"Climate change is a global problem that requires global solutions. Now more than ever, we need to work together with our partners around the world and at home to show how our collaboration can lead to results in this international fight. Today's carbon market linking agreement will add to the success we have already seen in reducing GHG emissions in Ontario, California and Quebec. We are stronger together and by linking our three carbon markets we will achieve even greater reductions at the lowest cost. I look forward to continuing to work with Governor Brown and Premier Couillard on our common goals, including advocating for the adoption of carbon markets and emissions cap programs across North America and around the world," said Ontario Premier Kathleen Wynne.

"Quebec has been active for many years in the fight against climate change. We believe in concerted and coherent actions with our partners as well as in cooperation to face the challenges posed by this global challenge. On behalf of the Government of Quebec, I want to assure Ontario and California of Quebec's full cooperation in the implementation and promotion of carbon markets in North America and internationally. We should rejoice in the progress made so far and the new milestones made today in strengthening our relations, which contribute to a more prosperous, more responsible and low carbon society," said Quebec Premier Philippe Couillard.

California's cap-and-trade program, which launched in 2012 and linked with Quebec's program in 2014, sets a declining limit on carbon pollution and creates a market to achieve the emission reduction targets in the most cost effective manner.

Expanding the partnership to include Ontario will further strengthen this market-based system and drive additional investment in clean energy and innovation.

A strong cap-and-trade program, together with California's full suite of climate programs and actions, will help ensure the state can cut carbon within its borders to meet its ambitious targets to reduce greenhouse gas emissions to 1990 levels by 2020 and 40 percent below 1990 levels by 2030.

The linkage agreement reflects California, Quebec and Ontario's shared commitment to operate an efficient, linked market and supports coordinated information sharing and continued consultation. It also lays out a process for other jurisdictions to join the linked program and establishes a working model for other states and provinces that are seeking cost-effective approaches to reducing their greenhouse gas emissions.

Today's agreement comes after Governor Brown signed AB 398 in July, extending the state's cap-and-trade program to 2030. In March, as required by SB 1018, Governor Brown produced findings that Ontario's program was as stringent as California's program and could be considered for linkage and in July, the California Air Resources Board adopted an amendment to its cap-and-trade regulation setting January 1, 2018 as the start of the linkage. Ontario and Quebec are both on track to finalize corresponding linkage amendments to their regulations.

While California, Quebec and Ontario developed their cap-and-trade programs through separate legislative and regulatory processes, the three jurisdictions have worked together to ensure that their programs complement each other and provide participants in all three jurisdictions with the benefits of an expanded program.

Under the linked program, carbon allowances and offset credits can be exchanged among participants in all three jurisdictions' cap-and-trade programs. The expanded market leverages additional greenhouse gas reductions at reduced cost and enhances the ability of jurisdictions to effectively work together to develop and implement cost-effective regional greenhouse gas emission reduction programs.

The agreement was signed today in Quebec City during the 7th joint meeting of Cabinet Ministers of the governments of Ontario and Quebec and can be found here. For additional information on the cap-and-trade program, visit: http://www.arb.ca.gov/cc/capandtrade/linkage/linkage.htm

Today's action follows the Governor's events and meetings earlier this week tied to Climate Week NYC, the Yale Climate Conference and the UN General Assembly. Over the course of the week, the Governor met with the UN Secretary-General, opened Climate Week NYC 2017 and discussed subnational climate action from governments and the business community at events with other global leaders. Governor Brown announced co-chairs for the Global Climate Action Summit, highlighted state, city and business-led climate initiatives at the Yale Climate Conference and joined fellow U.S. Climate Alliance co-chairs to release a report on the progress by member states to meet their portion of the U.S. commitment under the Paris Agreement. In addition, the Governor participated in a wide-ranging discussion organized by the Skoll Foundation and the UN Foundation on the need to mobilize all levels of society to decarbonize the economy, signed an agreement with Denmark on water and climate issues and welcomed the Republic of the Marshall Islands and other new members to the Under2 Coalition.

California's Climate Leadership

Governor Brown continues to build strong coalitions of partners committed to curbing carbon pollution in both the United States through the U.S. Climate Alliance and around the globe with the Under2 Coalition. The Governor has also launched America's Pledge on climate change with Michael Bloomberg to help compile and quantify the actions of states, cities and businesses in the U.S. to drive down emissions. In September 2018, the State of California will convene the Global Climate Action Summit in San Francisco, where representatives from subnational governments, businesses and civil society will gather with the direct goal of supporting the Paris Agreement. This November, the Governor is expected to take part in a climate symposium organized by the Vatican and in this year's United Nations Climate Change Conference in Bonn, Germany, ahead of which he was named Special Advisor for States and Regions.

Earlier this month, Governor Brown called for deeper Trans-Pacific collaboration on climate change at the Eastern Economic Forum in Vladivostok, Russia. This followed meetings in June with China's President Xi Jinping during the Governor's week-long trip to China and with Germany's top environmental official, Barbara Hendricks, in San Francisco. The Governor's efforts to broaden subnational collaboration on climate in recent years also include international agreements signed with leaders from the Czech Republic, the Netherlands, Mexico, China, North America, Japan, Israel, Peru, Chile, Australia, Scotland, Sweden, Germany, Fiji, Norway and the Republic of the Marshall Islands.

Reaffirming California's pioneering climate leadership, Governor Brown signed landmark legislation in July that that extends and improves the state's world-leading cap-and-trade program and establishes a groundbreaking program to measure and combat air pollution at the neighborhood level. In recent years, Governor Brown has signed legislation establishing the most ambitious greenhouse gas emission reduction targets in North America; setting the nation's toughest restrictions on destructive super pollutants; directing cap-and-trade funds to greenhouse gas reducing programs which benefit disadvantaged communities, support clean transportation and protect natural ecosystems; and requiring the state to generate half of its electricity from renewable sources by 2030 and double the rate of energy efficiency savings in buildings.

Photo captions:

1.) Governor Brown, Ontario Premier Kathleen Wynne (left) and Quebec Premier Philippe Couillard (center) sign agreement to expand cap-and-trade partnership.
2.) Governor Brown delivers remarks at the 7th joint meeting of Cabinet Ministers of the governments of Ontario and Quebec.

Photo credit: Sonia Cacoilo, Government of Ontario. For high-resolution copies of these photos, contact Danella Debel at Danella.Debel@gov.ca.gov.

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